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Hard to take advantage of $14 silver

Silver is trading around $14 an ounce, but buyers are not getting the advantage of a cheaper metal price.

As recently as June, silver was trading at $17. Now it is about 18 percent lower.

Unfortunately, rising premiums on silver American Eagles is eating up the savings.

If you want to buy a 2018 silver American Eagle online from APMEX, the premium on one coin is a staggering 26 percent. This, of course, comes down with 500-coin quantities to 19 percent.

Silver Eagle premiums have been on the high side for years compared to other forms of silver, but now they have been reinforced by a shortage of Eagle coins.

The Mint announced it had run out of coins Sept. 6. Sales began again Sept. 17.

However, rationing of the supply has returned. In Mint parlance, this is called “allocation.”

In a statement Sept. 19, the Mint said, “In an effort to more effectively manage our end-of-year production, the U.S. Mint is presently allocating its American Eagle Silver Bullion Coins. This process will help ensure that the Mint does not over-produce its 2018 bullion coins and will hopefully result in the Mint ending the year with zero inventory in anticipation of the launch of the 2019-dated inventory that will go on sale in early January.”

The fear of too much inventory is very real. Monthly sales from February to July fell below one million pieces. It was as low as 380,000 in May.

So far in September, the Mint has sold 1,962,500 silver American Eagle bullion coins. That exceeds what was sold in the months of May, June and July combined.

Allocation, the Mint explained, will work this way:

“Going forward, each Monday morning, an allocation will be prepared, based on the amount of inventory on the shelf. The Mint’s Authorized Purchasers will be allocated quantities based on past offtake performance.

“If an Authorized Purchaser fails to purchase all of the coins allocated to them for the week, the remaining unsold balance is added to the following week’s total amount to be allocated.”

In past years, news of silver Eagle shortages have spurred buyers to want more of them even if 100-ounce silver bars or BU 90 percent silver 1964 Kennedy half dollars are cheaper at premiums of 5 percent and 14 percent, respectively.

 

This article was originally printed in Numismatic News Express. >> Subscribe today

 

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